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A Study of the Engineering Modeling & Simulation Industry in South Korea

Author

Listed:
  • Jae Sung Kim

    (Korea Institute of Science and Technology Information)

  • Eun Jin Kim

    (Korea Institute of Science and Technology Information)

Abstract

Engineering modeling and simulation (M&S) technology is a smart manufacturing technology that replaces physical product manufacturing and test activities with virtual product manufacturing and verification. Engineering M&S is recognized as a core manufacturing technology that determines the manufacturing competitiveness of not only a company but also a country, because it reduces the time and cost of product development, while improving the quality of the product. Even though South Korea recognizes the industrial importance of engineering M&S technology and invests at the national level, supply and demand in the engineering M&S industry is still poor. The market size of engineering M&S in South Korea was 528 million-dollar in 2015, with sustained growth at a compound average growth rate (CAGR) of 11.3%, but this amounted to only 1/10 of the market in the U.S. and 1/3 of the market in the People's Republic of China. The biggest reason for such market-size inferiority appears to be the improper formation of the related ecosystem, due to underutilization of M&S by manufacturing companies and the small size of engineering M&S companies. According to a KISTI (Korea Institute of Science and Technology Information) survey by 2015, only 16 of the 401 engineering M&S companies in South Korea were domestic engineering SW development companies. Additionally, the utilization of engineering M&S SW by manufacturing companies is about 8.2%, with only 9% of those companies using domestic engineering SW. Because the inferiority of the engineering M&S industry could lead to the inferiority of national manufacturing competitiveness in the long term, the national interest mandates an increased investment in development of the engineering M&S industry.

Suggested Citation

  • Jae Sung Kim & Eun Jin Kim, 2016. "A Study of the Engineering Modeling & Simulation Industry in South Korea," Proceedings of International Academic Conferences 3606341, International Institute of Social and Economic Sciences.
  • Handle: RePEc:sek:iacpro:3606341
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    File URL: https://iises.net/proceedings/23rd-international-academic-conference-venice/table-of-content/detail?cid=36&iid=054&rid=6341
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    More about this item

    Keywords

    Engineering Modeling and Simulation; CAE; CFD/FEA; Engineering SW; Manufacturing Innovation;
    All these keywords.

    JEL classification:

    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • A10 - General Economics and Teaching - - General Economics - - - General

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